ConocoPhillips acknowledges ‘uncertainty’ about JVs on split-up plan

27 July 2011 21:27[Source: ICIS news]

HOUSTON (ICIS)--ConocoPhillips’ plan to split into independent downstream and upstream companies has created uncertainty about the future of its joint ventures (JV), chief financial officer Jeff Sheets said on Wednesday.

Earlier this month, ConocoPhillips announced it will spin off its downstream refining and marketing businesses from its upstream oil and gas exploration and production operations.

“We understand that there is uncertainty about the exact allocation of assets, and where the joint ventures will be, as well as what the capital structure will be for these companies, and the management teams of these companies,” Sheets told analysts during the company’s second-quarter results conference call.

Sheets said ConocoPhillips’ joint venture partners have “various rights” that the company will “need to work through” as it decides which entity the joint ventures will go into. He added that discussions with partners on those matters have already begun.

He would not comment on the specifics of any “change of control” or “right of first refusal” clauses in ConocoPhillips' joint venture agreements.

Sheets said ConocoPhillips plans to provide additional information about the split-up in an update in September.

The CEOs for the downstream and upstream companies are expected to be named before the end of 2011, Sheets added.

ConocoPhillips' current CEO Jim Mulva plans to retire following completion of the split-up in the first half of 2012, the company had said earlier.

In related news on Wednesday, ConocoPhillips reported a 44% year-on-year increase in second-quarter chemical segment earnings because of higher margins in olefins and polyolefins, higher volumes, as well as equity income from Chevron Phillips Chemical’s ventures in the ?xml:namespace>Middle East.